Gold Bullion Coins: Legal Tender, Premiums and the Collectable Trap
A bullion coin holds the same metal as a bar of the same weight. What it adds is legal tender status, easy recognition, and in Canada, eligibility for a registered plan.
A one ounce gold bullion coin and a one ounce gold bar contain the same metal. The coin costs a little more, and in exchange you get something instantly recognisable, backed by a national mint, and easier to sell to a private buyer.
Key takeaways
- Royal Canadian Mint produced the first bullion coin at 99.99 percent purity, the Gold Maple Leaf, and also makes a 99.999 percent version.
- Coins are legal tender, which makes them widely recognised and easy to sell privately.
- Coins usually carry a slightly higher premium than bars of the same weight.
- Under CRA Income Tax Folio S3-F10-C1, a Royal Canadian Mint legal tender bullion coin at 99.5 percent purity or higher can be a qualified investment for a registered plan.
- That rule caps the coin's value at 110 percent of its metal content, which excludes collectable coins.
We do not sell bullion
Vanhess is a jewellery shop in Coquitlam, British Columbia. We sell solid gold jewellery. We do not sell, buy or broker bars, coins, ingots or wafers, and we are not a bullion dealer or a financial advisor. This page explains how bullion works so you can compare it fairly with jewellery. It is not a recommendation to buy anything.
Bullion coins against collectable coins
This is the distinction that costs people money. A bullion coin is priced off its metal content plus a modest premium. A numismatic or collectable coin is priced off rarity, condition and demand from collectors, and that price can be a large multiple of the metal in it.
| Bullion coin | Collectable coin | |
|---|---|---|
| What sets the price | Metal content plus a small premium | Rarity, condition and collector demand |
| Price relationship to gold | Tracks the gold price closely | Can move independently of the gold price |
| Resale | Any bullion dealer, quickly | Specialist collector market |
| Registered plan eligible | Yes, if the CRA conditions are met | Generally no, the 110% cap excludes it |
| Good for | Owning gold | Collecting coins |
Be careful
If you are buying gold as metal, a collectable premium is money spent on something other than gold. It may be a fine purchase on its own terms, but it is not a more efficient way to own the metal, and it will not qualify for an RRSP or TFSA under the CRA 110 percent rule.
Security features
Modern bullion coins carry anti-counterfeiting features. The Royal Canadian Mint states that its one ounce 99.99 percent pure Gold Maple Leaf bullion coins have radial lines, a micro-engraved maple leaf, and Bullion DNA anti-counterfeiting technology. Its gold bars carry two textured maple leaf security marks, micro-engraved with laser technology and visible only under magnification.
Worth knowing
Security features only help if you or your buyer can check them. Part of the reason coins from a well-known mint sell easily is that dealers already know exactly what to look for.
Frequently Asked Questions
Are gold coins better than gold bars?
Neither is better in general. Coins carry a slightly higher premium but are legal tender, widely recognised and easy to sell privately. Bars, especially larger ones, carry a lower premium per gram. In Canada, Royal Canadian Mint bullion coins and bars from LBMA-accredited refiners can both qualify for a registered plan under CRA Folio S3-F10-C1.
What purity is a Gold Maple Leaf coin?
The Royal Canadian Mint states that the Gold Maple Leaf was the first bullion coin to reach 99.99 percent purity, and it also produces an Our Purest Maple Leaf at 99.999 percent, described by the Mint as the highest purity standard of refined gold.
Should I buy collectable gold coins as an investment?
If your aim is to own gold, no. A collectable premium is money paid for rarity rather than metal, and CRA's 110 percent rule means such coins generally cannot go in a registered plan. Collectable coins can be a rewarding hobby, but they are a different market from bullion.